Stress-testing the punishment solution: sanctions and performance in public-good games - Softcover

Inhaltsangabe

In economic theory, a public-good game is an abstract description of a class of situations in which the individual pursuit of one‘s private interest by all actors leads to an outcome leaving everyone worse off than had they cooperated. While the game is a theoretic construct, the class of situation it describes is very real, in the sense that there is an abundant number of instances in everyday life displaying the characteristics of a public-good game. Examples can be found at every level from the small-group problem of doing the dishes in a shared at over the communitylevel question of who volunteers to take on an honorary office, to the grand scale, when it comes to the exertion of effort to reduce global warming by reducing one‘s energy usage and litter production. What are the main lessons to be learnt from this dissertation? First and foremost, punishment mechanisms are a double-edged sword. However, when carefully designed, they can enhance cooperation and eciency. This feature of punishment mechanisms is furthermore robust to a number of perturbations. Neither the introduction of dynamics, retaliation and counter-retaliation, nor competing other institutions will change this. However, the working mechanism – and thus, the precise conditions under which the mechanism will be effective – is still far from clearly understood.

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